EXHIBIT 10.16(A)
TERM LOAN AND SECURITY AGREEMENT
DATED AS OF JULY 1, 2000
TERM LOAN AGREEMENT dated as of July 1, 2000 between PHARMACEUTICAL
FORMULATIONS INC., 000 Xxxxxxxxxx Xxxxxx, Xxxxxx, Xxx Xxxxxx 00000, a New Jersey
corporation (the "Borrower"), and ICC INDUSTRIES INC., 000 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, a New York corporation (the "Lender").
RECITALS
WHEREAS, the Lender and the Borrower have previously entered into a
Term Loan and Security Agreement dated as of April 1, 1999 (the "Prior Loan
Agreement"), and Borrower executed a Promissory Note dated April 1, 1999 (the
"Prior Promissory Note") in the amount of three million dollars ($3,000,000);
and
WHEREAS, the Lender has loaned to Borrower additional sums totaling
four million seven hundred fifty two thousand one hundred dollars ($4,752,100),
in the amounts and on the dates set forth in EXHIBIT A attached hereto; and
WHEREAS, the Borrower is presently indebted to the Lender in the sum
of $7,752,100 in connection with the aforementioned loans made by Lender to
Borrower; and
WHEREAS, the Lender has agreed to extend the time for payment of these
loans in accordance with the payment schedule set forth in an amended Promissory
Note to be executed by Borrower in the form of EXHIBIT B attached hereto; and
NOW, THEREFORE, in consideration of the foregoing and the covenants
contained herein, the Borrower and the Lender agree as follows:
ARTICLE I
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 1.1. THE LOAN. The parties agree that the loans outstanding
from Lender to Borrower totaling $7,752,100 shall be governed by the terms and
conditions hereinafter set forth, and said loans shall hereinafter referred to
as the "Loan".
SECTION 1.2. INTEREST AND REPAYMENT. The Borrower shall repay, and
shall pay interest on, the aggregate unpaid principal amount of the Loan in
accordance with the Note, evidencing the indebtedness resulting from such Loan
and delivered to the Lender pursuant to Article II.
SECTION 1.3. OPTIONAL PREPAYMENTS. The Borrower may prepay the Note in
whole or in part with accrued interest to the date of such prepayment on the
amount prepaid.
SECTION 1.4. CONVERSION OF INVOICES. The amounts due to Lender under
the invoices identified in Exhibit A are no longer due and payable under the
terms set forth in said invoices. Instead, said indebtedness to Lender is hereby
converted to the indebtedness covered by the Loan set forth herein.
SECTION 1.5. PAYMENTS AND COMPUTATIONS. The Borrower shall make each
payment under any Loan Document (as hereinafter defined) not later than 3:00
p.m. (New York City time) on the day when due in lawful money of the United
States of America to the Lender at its address referred to in Section 6.2 in
same day funds. All computations of interest under the Note shall be made by the
Lender on the basis of a year of 360 days, for the actual number of days elapsed
(including the first day but excluding the last day).
SECTION 1.6. PAYMENT ON NON-BUSINESS DAYS. Whenever any payment to be
made hereunder or under the Note shall be stated to be due on a Saturday, Sunday
or a public or bank holiday or the equivalent for banks generally under the laws
of the State of New York (any other day being a "Business Day"), such payment
may be made on the next succeeding Business Day, and such extension of time
shall in such case be included in the computation of payment of interest.
ARTICLE II
CONDITIONS OF LENDING
SECTION 2.1. CONDITIONS OF LENDING. The obligation of the Lender to
make the Loan is subject to the satisfaction of the following conditions
precedent:
(A) The Lender shall have received the Note, dated as of the date
hereof, in form and substance satisfactory to the Lender:
(B) The following statements shall be true as of the date hereof and
the Lender shall have received a certificate signed by a duly authorized officer
of Borrower, dated the date hereof, stating that:
(i) The representations and warranties contained in Section
3.1 of this Agreement are correct on and as of the date hereof;
and
(ii) No event has occurred and is continuing, or would
result from such Loan, which constitutes an Event of Default (as
hereinafter defined) or would constitute an Event of Default but
for the requirement that notice be given or time elapse or both;
(C) The Lender shall have received a certified copy of the resolutions
of the Board of Directors of Borrower, approving each Loan Document to which it
is a party, and of all documents evidencing other necessary corporate action, if
any, with respect to each such Loan Document;
(D) The Lender shall have received such other approvals, opinions or
documents as the Lender may reasonably request.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. REPRESENTATIONS AND WARRANTIES OF THE BORROWER. The
Borrower represents and warrants as follows:
(A) The Borrower is a corporation duly incorporated, validly existing
and in good standing under the laws of the state of Delaware, has the power to
own its assets and to transact the business in which it is now engaged and is
duly qualified as a foreign corporation in good standing under the laws of each
jurisdiction where its ownership or lease of property or the conduct of its
business requires such qualification.
(B) The execution, delivery and performance by the Borrower of this
Agreement are within the Borrower's corporate powers, have been duly authorized
by all necessary corporate action, do not contravene (i) the Borrower's charter
or by-laws or (ii) any law or contractual restriction binding on or affecting
the Borrower, and do not result in or require the creation of any lien, security
interest or other charge or encumbrance (other than pursuant hereto) upon or
with respect to any of its properties.
(C) No authorization or approval or other action by, and no notice to
or filing with, any governmental authority or regulatory body is required for
the due execution, delivery and performance by the Borrower of this Agreement.
(D) This Agreement is a legal, valid and binding obligation of the
Borrower enforceable against the Borrower in accordance with its terms.
(E) There is no pending or threatened action or proceeding affecting
the Borrower before any court, governmental agency or arbitrator, which may
materially adversely affect the financial condition or operations of the
Borrower.
(F) The proceeds of the Loan will be used solely for the purpose of
Borrower's working capital and will not be used to acquire any security in any
transaction which is subject to Sections 13 and 14 of the Securities Exchange
Act of 1934.
ARTICLE IV
COVENANTS OF THE BORROWER
SECTION 4.1. AFFIRMATIVE COVENANT. So long as the Note shall remain
unpaid, the Borrower will, unless the Lender shall otherwise consent in writing:
(A) COMPLIANCE WITH LAWS, ETC. Comply, and cause each of its
subsidiaries to comply, in all material respects, with all applicable laws,
rules, regulations and orders, such compliance to include, without limitation,
paying before the same become delinquent all taxes, assessments and governmental
charges imposed upon it or upon its property except to the extent contested in
good faith.
SECTION 4.2. NEGATIVE COVENANT. So long as the Note shall remain
unpaid, the Borrower will not, without the written consent of the Lender:
(A) LIENS, ETC. Other than those liens that presently exist, create or
suffer to exist any lien, security interest or other charge or encumbrance, or
any other type of preferential arrangement, upon or with respect to any of its
properties or assets, whether now owned or hereafter acquired, or assign any
right to receive income.
ARTICLE V
SECURITY INTEREST
SECTION 5.1. SECURITY INTEREST. The Borrower has granted Lender a
security interest in all of its assets, which shall secure Borrower's loans
under this Agreement. That security interest is reflected by a UCC 1 filing
which has been filed with the State of New Jersey and County of Middlesex.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.1. EVENTS OF DEFAULT. If any of the following events
("Events of Default") shall occur and be continuing:
(A) The Borrower shall fail to pay any installment of principal of, or
interest on, the Note within one Business Day of title date when due; or
(B) Any representation or warranty made by Borrower (or any of its
respective officers) under or in connection with any Loan Document shall prove
to have been incorrect in any material respect when made; or
(C) Borrower shall fail to perform or observe any other term, covenant
or agreement contained in any Loan Document on their respective parts to be
performed or observed; or
(D) Borrower or any of its subsidiaries shall generally not pay their
respective debts as such debts become due, or shall admit in writing their
inability to pay their respective debts generally, or shall make a general
assignment for the benefit of creditors; or any proceeding shall be instituted
by or against Borrower or any of its subsidiaries seeking to adjudicate it a
bankrupt or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of it or its debts
under any law relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment of a
receiver, trustee, or other similar official for it or for any substantial part
of its property; or Borrower or any of its subsidiaries shall take any corporate
action to authorize any of the actions set forth above in this subsection (E);
or
(E) Any judgment or order for the payment of money shall be rendered
against Borrower or any of its subsidiaries and either (i) enforcement
proceedings shall have been commenced by any creditor upon such judgment or
order or (ii) there shall be any period of 10 consecutive days during which a
stay of enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; or
ARTICLE VII
MISCELLANEOUS
SECTION 7.1. AMENDMENT, ETC. No amendment or waiver of any provision
of this Agreement or the Note, nor consent to any departure by the Borrower
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the Lender and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given.
SECTION 7.2. NOTICES, ETC. Any notice, demand, request or other
communication hereunder shall be in writing and shall be delivered by personal
service or mailed certified mail, postage prepaid, return receipt requested, to
the parties at the addresses for such notices set forth below, with a copy also
sent by telefax to the telefax number listed below. Such notices shall be
effective upon receipt by the respective addresses thereof. The parties hereto
may change their respective addresses for such notices by delivering or mailing
to the other party hereto, as aforesaid, a notice of such change.
If to the Borrower:
Pharmaceutical Formulations Inc.
000 Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000
Attention: President
Fax No.: 000-000-0000
If to the Lender:
ICC Industries Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: President
Fax No.: 000-000-0000
SECTION 7.3. NO WAIVER; REMEDIES. No failure on the part of the Lender
to exercise, and no delay in exercising, any right under any Loan Document shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right under any Loan Document preclude any other or further exercise thereof or
the exercise of any other right. The remedies provided in the Loan Documents are
cumulative and not exclusive of any remedies provided by law.
SECTION 7.4. ACCOUNTING TERMS. All accounting terms not specifically
defined herein shall be construed in accordance with generally accepted
accounting principles consistently applied, except as otherwise stated herein.
SECTION 7.5. COSTS, EXPENSES AND TAXES. The Borrower agrees to pay on
demand all costs and expenses in connection with the preparation, execution,
delivery, filing, recording and administration of the Loan Documents and the
other documents to be delivered under the Loan Documents, including, without
limitation, the fees and out-of-pocket expenses of counsel for the Lender, with
respect thereto and with respect to advising the Lender as to its rights and
responsibilities under the Loan Documents, and all costs and expenses, if any
(including counsel fees and expenses), in connection with the enforcement of the
Loan Documents and the other documents to be delivered under the Loan Documents.
In addition, the Borrower shall pay any and all stamp and other taxes and fees
payable or determined to be payable in connection with the execution, delivery,
filing and recording of the Loan Documents and the other documents to be
delivered under the Loan Documents, and agrees to save the Lender harmless from
and against any and all liabilities with respect to or resulting from any delay
in paying or omission to pay such taxes and fees.
SECTION 7.6. RIGHT OF SET-OFF. Upon the occurrence and during the
continuance of any Event of Default the Lender is hereby authorized at any time
and from time to time, to the fullest extent permitted by law, to set off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by the Lender
to or for the credit or the account of the Borrower against any and all of the
obligations of the Borrower now or hereafter existing under any Loan Document,
irrespective of whether or not the Lender shall have made any demand under such
Loan Document and although such obligations may be unmatured. The Lender agrees
promptly to notify the Borrower after any such set-off and application, provided
that the failure to give such notice shall not affect the validity of such
set-off and application. The rights of the Lender under this section are in
addition to other rights and remedies (including, without limitation, other
rights of set-off) which the Lender may have.
SECTION 7.7. PRIOR AGREEMENT. This Term Loan and Security Agreement
amends and restates the Prior Loan Agreement dated as of April 1, 1999.
SECTION 7.8. BINDING EFFECT; GOVERNING LAW; JURISDICTION.
(A) This Agreement shall be binding upon and inure to the benefit
of the Borrower and the Lender and their respective successors and
assigns, except that the Borrower shall not have the right to assign
its rights hereunder or any interest herein without the prior written
consent of the Lender. This Agreement and the Note shall be governed
by, and construed in accordance with, the laws of the State of New
York.
(B) The Borrower agrees that any legal action or proceeding with
respect to this Agreement or to enforce any judgment obtained against
the Borrower in connection herewith may be brought by the Lender in
the courts of the State of New York or in the United States District
Court for the Southern District of New York, or any other court to the
jurisdiction of which the Borrower or any of the Borrower's property
is or may be subject. The Borrower irrevocably submits to the
jurisdiction of the courts of the State of New York or of the United
States District Court for the Southern District of New York, and
irrevocably waives any present or future claim that any such court is
an inconvenient forum, in connection with any action or proceeding
arising out of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
PHARMACEUTICAL FORMATIONS INC. ICC INDUSTRIES INC.
(Borrower) (Lender)
By: /S/ X. XXXXXXXX By: /S/ XXXXX XXXXXXXX
_______________________________ _____________________________
Name: X. Xxxxxxxx Name:
Title: Vice President-Sales and Marketing Title:
EXHIBIT A
EXHIBIT A - LOANS MADE BY LENDER
ICC INDUSTRIES INC.
Original Loan - $3,000,000 made April 1, 1999
Additional Loans as of July 1, 2000:
AMOUNT OF LOAN DATE
-------------- ----
$312,100.00 03/23/00
$450,000.00 03/30/00
$150,000.00 04/17/00
$75,000.00 04/18/00
$180,000.00 04/24/00
$200,000.00 04/25/00
$40,000.00 04/26/00
$50,000.00 05/01/00
$165,000.00 05/02/00
$100,000.00 05/03/00
$145,000.00 05/05/00
$100,000.00 05/08/00
$175,000.00 05/09/00
$30,000.00 05/10/00
$100,000.00 05/11/00
$150,000.00 05/18/00
$80,000.00 05/19/00
$140,000.00 05/22/00
$100,000.00 05/23/00
$50,000.00 05/25/00
$120,000.00 05/26/00
$525,000.00 05/26/00
$155,000.00 05/30/00
$190,000.00 05/21/00
$75,000.00 06/01/00
$225,000.00 06/02/00
$125,000.00 06/05/00
$135,000.00 06/06/00
$100,000.00 06/08/00
$50,000.00 06/09/00
$100,000.00 06/12/00
$100,000.00 06/20/00
$30,000.00 06/21/00
$30,000.00 06/26/00
----------
Total Additional Loans: $4,752,100.00
Total of all Loans as of July 1, 2000: $7,752,100.00
EXHIBIT B
PROMISSORY NOTE
$7,752,100 New York, New York
(Seven Million Seven Hundred Fifty Two Thousand July 1, 0000
Xxx Hundred Dollars and no Cents)
FOR VALUE RECEIVED, the ___________ undersigned, ________________
PHARMACEUTICAL FORMULATIONS INC., 000 Xxxxxxxxxx Xxxxxx, Xxxxxx, Xxx Xxxxxx
00000, a New Jersey corporation (the "Borrower") HEREBY PROMISES TO PAY to the
order of ICC INDUSTRIES INC., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, a New
York corporation (the "Lender") the principal sum of seven million seven hundred
fifty two thousand one hundred dollars ($7,752,100) on the following dates in
the following amounts:
DATE AMOUNT TO BE REPAID
From present date until ________, 2001 Interest-only payments on the 1st of
each month
_________, 2001 $__________ plus interest
_________, 2001 $__________ plus interest
_________, 2001 $__________ plus interest
_________, 2001 $__________ plus interest
_________, 2001 $__________ plus interest
_________, 2001 $__________ plus interest
_________, 2001 $__________ plus interest
_________, 2001 $__________ plus interest
_________, 2001 $__________ plus interest
_________, 2001 $__________ plus interest
_________, 2001 $__________ plus interest
_________, 2001 $__________ plus interest
_________, 2002 $__________ plus interest
_________, 2002 $__________ plus interest
_________, 2002 $__________ plus interest
_________, 2002 $__________ plus interest
_________, 2002 $__________ plus interest
The interest shall be on any and all principal amounts remaining unpaid
hereunder from time to time outstanding from the date hereof until said
principal amounts are paid in full, payable monthly in arrears commencing
_______, 2001, and thereafter during the term hereof and on the final day when
said principal amounts are paid and, with respect to interest on any overdue
principal amount, payable on demand, at a fluctuating interest rate per annum
equal to one percent (1%) per annum above the rate of interest announced
publicly by Standard Chartered Bank in New York, New York, USA, from time to
time as said bank's prime or base rate (the "Base Rate"). The Borrower
acknowledges that the Base Rate does not necessarily reflect the lowest rate of
interest charged by said bank to any class of customer or in respect of any
class of loan. Each change in the fluctuating interest rate hereunder shall take
effect simultaneously with the corresponding change in the Base Rate and all
computations of interest shall be made on the basis of a year of 360 days, for
the actual number of days elapsed.
Both principal and interest are payable in lawful money of the United States of
America to the Lender at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, not later
than 12:00 noon (New York City time) on the day when due in same day funds, or
at such other address as the holder hereof may direct. Whenever any payment
shall be stated to be due on a Saturday, Sunday or a public or bank holiday or
the equivalent for banks generally under the laws of the State of New York (any
other day being a "Business Day"), such payment may be made on the next
succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest.
In the event of any default in connection with any payment under the
aforementioned payment schedule, all remaining unpaid amounts shall immediately
become due and payable demand.
This Note is the Note referred to in, and is entitled to the benefits of, the
Term Loan and Security Agreement dated as of November 1, 2000 (the "Term Loan
Agreement"). The Term Loan Agreement, among other things, contains provisions
for acceleration of the maturity hereof upon the happening of certain stated
events and also for prepayments on account of principal hereof prior to the
maturity hereof upon the terms and conditions therein specified.
This Note amends and restates the Promissory Note executed by Borrower dated
April 1, 1999. This note is secured by a Security Interest granted by Borrower
to Lender covering all of Lender's assets, and reflected by a UCC 1 which has
been filed with the state of New Jersey and county of Middlesex.
This Note shall be governed by and construed in accordance with the laws of the
State of New York applicable to agreements made and to be performed therein
(without giving effect to any principles of conflicts of law).
The Borrower unconditionally and irrevocably agrees that any legal action, suit
or proceeding against it with respect to its obligations or liabilities
hereunder or arising out of or in connection with this Note or the transactions
contemplated hereby for recognition or enforcement of any judgment rendered in
any such action, suit or proceeding may be brought in the United States Federal
Court for the Southern District of New York or in the courts of the State of New
York, as the holder hereof may elect.
PHARMACEUTICAL FORMULATIONS, INC.
By:__________________________________
Name:
Title: